EURO CONTENT ON SIDELINES High Street Networking

2 July 2001, 10:42 EURO CONTENT ON SIDELINES

By Yoshiko Mori //Contrary to the volatile dollar/yen, the euro was steady, standing at $0.8474/79 by 0530 GMT, compared with $0.8489/94 in late New York on Friday. Against the yen, it was 105.36/52 yen from 105.91 in New York. "The euro is basically confined in a range of $0.84-0.87 with little momentum," said Hideki Hayashi, global strategist, Shinko Securities.
"In my private view, the economy in the euro area would decelerate further towards a fall. So it would be ideal if the ECB could launch a pre-emptive credit easing in July," he said.
But some dealers see a growing risk for the euro to retest $0.8428 suport on doubts the ECB will ease policy this week.
The ECB will hold its governing council meeting to make a credit policy decision on July 5 and July 19.
On Friday, the ECB said M3, including cash in circulation and money held in bank deposits and short-term securities, rose much faster than expected at 5.4 percent year-on-year in May.
M3 growth was 4.8 percent in April and well above its 4.5 percent benchmark. European economists said that given the steep M3 growth, it would be harder for the ECB to justify a rate cut at its July 5 meeting.
For clues on ECB policy, some traders were awaiting the Eurozone PMI (purchasing managers idex) due at 0800 GMT.
Elsewhere, the dollar edged up to 1.7960 Swiss francs from 1.7935 on Friday thanks in part to talk a major Swiss bank had advised clients to buy dollar/Swiss for a run toward the psychological 2.0000 franc level. ($1=124.75 Yen)